In light of the recent price drops on the Phenom II 940 to below $270 seems to make the value of building a system around it worth it. Here's my details.

1. What YOUR PC will be used for. That means what types of tasks you'll be performing.
Gaming, some Photoshop and Flash (more casual these days)

2. What YOURbudget is. A price range is acceptable as long as it's not more than a 20% spread
$950-$1200ish

3. What countryYOU will be buying YOUR parts from.
Canada

4. IF YOU have a brand preference. That means, are you an Intel-Fanboy, AMD-Fanboy, ATI-Fanboy, nVidia-Fanboy, Seagate-Fanboy, WD-Fanboy, etc, etc, etc, you get the picture.
None

5. If YOU intend on using any of YOURcurrent parts, and if so, what those parts are.
Don't see any value in breaking up what I have. Just pass this comp onto someone in the family as is

6. IF YOU have searched and/or read similar threads.
Yes the other AMD threads but it was suggested I start my own thread. I am not sure about video card and power needs. Whats overkill etc

7. IF YOU plan on overclocking or run the system at default speeds.
Sounds like with the Phenom II 940 on air it might be worth a shot

8. WHEN do you plan to build it?
Next month or 2

- I'll be gaming on a 20inch 1680x1050, but what if I upgrade to a 24inch one day with higher resolution?
- Sounds like the new AMD Dragon set up is more efficient with an ATI card so not sure of the hit if I go Nvidia. Would Crossfire be more beneficial if upgrading monitor size in the future?.
- Storage is not a biggy for me as I have an 80G now that is half full and a 500G external
- Seems like I read a lot of issues with current ATI drivers is there anything to be concerned about?

Pretty good price I think (there is a Mail in rebate though) and the performance is impressive if you check the reviews. If you're set on ATI, I think they've had driver issues primarily with their dual GPU cards like the 4870 X2.

Somebody smarter than I will soon chime in but good luck with your build!

For GPU, I'd get the ATI 4850 or 4870 or GTX260 Core 216. If you get a 24" monitor, then the GTX260 Core 216 or 4870 would be mroe than enough. I see no point in spending extra for the GTX280.

For PSU, if you want modular, then get the Corsair HX620.

If you go Intel and want quad core, get the Intel Q6600 and ASUS P5Q Pro or Gigabyte EP45-DS3R or UD3P. They are all great motherboards.

For $20 or $30 more, you can get a 640GB hard drive. It offers the best bang for buck in my opinion in terms of storage and performance.

Also look into buying from NCIX, as they are essentially the same company as Direct Canada. Finally, don't forget to price match. Do note that prices may fluctuate within a month or two's time, so make sure that you are getting what you want at whatever price you are paying in the future.

Crossfire would help in the future if you get a monitor that does like 1920x1200 or higher.

With 1680x1050 a single HD4850 would be fine for the majority of games on maximum settings though perhaps with little/none AA. Looks like you have some money though so a HD4870 1GB would be a better choice. No point in getting a 512MB 4870 when it isn't much cheaper. Also the 1GB 4870 would be able to hold its own on a 24" LCD too.

Also depending on how much storage you need, you might consider the WD 640GB instead as it performs just as well as the 320GB (assuming you get a single platter one). All the 640s though are pretty much guaranteed to be dual 320GB platters these days.

As for ATI drivers, they are overall fine and Catalyst 9.1 is supposed to fix a ton of things however it's been delayed since they found more bugs. The real issues arise with Crossfire IMO, single cards are fine.

That 750W Corsair PSU will be good, especially if you move to Crossfire at some point.

I'm not sure if that whole "Dragon" platform marketing scheme means anything or not. Even if it does, it's probably minimal gains.

Oh and if you plan to OC, I'd definitely suggest some form of aftermarket cooling like the OCZ Vendetta 2 or other various HDT (heatpipe direct touch) heatsinks.